In Chinese Soccer, Government Keeps Moving the Goal Posts

Bloomberg News

June 15, 2017, 5:00 PM EDTUpdated on June 15, 2017, 5:33 PM EDT

Government is trying to curb an investment boom it triggered

Frequent rule changes are making it hard for teams to plan

Imagine if, along with everything else, the U.S. presidency gave Donald Trump the power to change the rules of his favorite sport. That wouldn’t be so different from the scenario facing professional soccer in China, where the highest officials in the land have made the game a national project.

Brazil’s Hulk arrives in Shanghai in June 2016.

Photographer: AFP via Getty Images

China threw the vast power of the state behind soccer in 2015, when President Xi Jinping, the game’s most powerful fan, announced a plan to transform the country into a world beater at the sport he played as a student. China’s top teams responded by spending hundreds of millions of dollars to hire foreign stars like Brazilian striker Hulk and Argentinian forward Carlos Tevez in hopes a higher level of play would trickle down to the national team and help build world-class leagues overnight.

Carlos Tevez of Shanghai Shenhua.

Photographer: VCG via Getty Images

But now a sudden spate of policy reversals, mandating that young Chinese players fill starting lineups, has undermined the value of those investments and put club owners in a quandary over what kind of teams they’ll be able to field. It’s also forced many close to the sport to question openly whether bureaucrats really know what’s best for the beautiful game.

“The government should respect the rules of the market, instead of over-regulating," said Tony Xia, the Chinese businessman who made headlines last year when he purchased the English soccer club, Aston Villa. Xia spoke in an interview at a soccer conference last week in Beijing, where top officials from several teams railed against the rules-changes handed down in January, and then again last month.

Soccer’s earliest incarnation was invented in China more than 2,000 years ago as a military training exercise -- players kicked a leather ball at a goal while fending off attackers without using their hands -- but ancient history hasn’t translated into a winning tradition in the modern game.

The country has been to the World Cup only once in the 84 years of the tournament, in 2002, when the team went winless --and goalless-- in all three of its matches. The national men’s team recently placed 82rd in FIFA rankings, just ahead of the Faroe Islands, a remote archipelago with fewer than 50,000 inhabitants.

Hopes for a berth in next year’s World Cup were all but dashed this week, when China gave up a goal in the final minute of a qualifying match to finish with a 2-2 draw against a team fielded by war-torn Syria.

Since 2015, though, when President Xi announced his grand plan to win respectability for China in international soccer, the country has poured the kind of energy into the sport once reserved for winning Olympic medals in individual competitions like gymnastics, swimming and diving.

The Evergrande Football School in Guangdong province, China.

Photographer: Tariq Panja/Bloomberg

Soccer has become part of compulsory education in elementary and secondary schools. Tens of thousands of soccer fields are being built. China Evergrande Group, the real estate giant, spent a reported $185 million to build the world’s biggest soccer school, a sprawling campus that looks like a concrete replica of Harry Potter’s Hogwarts School surrounded by 50 practice pitches. (A four-story tall replica of the FIFA World Cup Trophy at the school’s entrance had to be torn down because of trademark issues.)

Oscar of Shanghai SIPG.

Photographer:; VCG via Getty Images

Meanwhile, the country’s biggest teams answered Xi Jinping’s call with an investment binge, offering out-sized salaries to South American and European players in order to jumpstart their programs. In January, the Brazilian-born midfielder known as Oscar, a reserve on the U.K.’s Premier League champion Chelsea, became one of the sport’s highest paid players, signing with Shanghai SIPG for $25.5 million a year.

All told, teams in the Chinese Super League, the country’s top division, paid more than $450 million to hire foreign players in 2016, passing France to become the world’s fifth-biggest spender.

That’s when the government started telling team officials how to run their clubs.

In January, China’s General Administration of Sport issued a statement telling teams to stop “irresponsible spending.” The Chinese Football Association followed-up with a requirement that teams include at least one Chinese player under the age of 23 in their starting lineups. And coaches would only be able to start three imported stars -- not four, as the old rules stipulated.

Then, just as teams were adjusting to the new regime, the rules changed again. Last month, the football association said coaches would now have to field at least one homegrown player under 23 for every foreigner in their lineups-- another tweak designed to make sure China’s pro leagues feature Chinese players.

As if that weren’t enough, teams were told they’d be slapped with a new luxury tax. For every dollar spent on an imported star, clubs may now have to pay equally into a government fund designed to promote China’s soccer program-- effectively doubling the price of overseas talent, and casting a long shadow over soccer’s trading season, which officially opens Monday.

Mads Davidsen, head of training development at Shanghai SIPG, the club that this year brought Oscar to China, was among sport officials at last week’s soccer conference who objected to what he described as government meddling.

It "will no doubt lower the level of the game," he said.

The new rules, Davidsen said, could end up subverting the government’s own goals because China’s up-and-coming stars can’t develop without competing against the best possible players.

Representative from both the General Administration of Sport and the China Football Association declined to comment.

Students during a training session at the Evergrande Football School.

Photographer: VCG via Getty Images

Xia, the Aston Villa club owner who this year also agreed to buy a Hollywood film production studio, said state intervention is likely to backfire, as it did in the stock market where officials took heavy-handed steps to stop routs in 2015 and 2016, and only made matters worse. “It’s like the government is playing whack-a-mole,” he said. “What we need are guidelines, not new rules every time the situation changes.”

One unintended consequence of the government’s moves will be higher prices for younger players, who are suddenly in much greater demand, according to Gong Lei, president of Chongqing Dangdai Lifan Football Club, a team less flush with cash than some. “Small- and medium-sized clubs will feel especially difficult in dealing with this," said Gong, who played for China at the 1985 Youth World Cup.

Gong said his club is in negotiation to buy several minor-league teams in France and Belgium in order to develop a training program for its own athletes.

Li Yidong, chairman of China Sports Media Ltd., which paid the equivalent of $1.2 billion for five years of the broadcast rights to the league’s games, said he wants to renegotiate his contract with the football association because the quality of the product he bought is now likely to be diminished.

“It is not what we paid for," he said in an interview last week at his Beijing office.